Complete Genomics (GNOM) Discloses $3.30/Sh Unsolicited Bid, Says Doesn't Not Constitute a Superior Proposal

November 13, 2012 9:02 AM EST
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Takeover target Complete Genomics, Inc. (NASDAQ: GNOM) is higher in pre-open trading Tuesday following the disclosure it receive an unsolicited bid on November 5 from "Party H" although it told "Party H" that its plan didn't constitute a superior proposal.

In September, Complete Genomics agreed to be acquired by BGI-Shenzhen for $3.15 per share in cash.

From the filing:
  • On November 5, 2012, Party H submitted an unsolicited non-binding proposal to acquire the Company, which included the following terms:

  • A per share cash purchase price of $3.30, which represented approximately a 5% premium over the consideration offered by Purchaser;

  • Financed with cash-on-hand;

  • Without any condition for further due diligence; and

  • Subject to negotiation of definitive transaction agreements on terms consistent with those agreed between and among the Company, Parent and Purchaser.

    On November 5, 2012, the Company provided a copy of Party H’s non-binding proposal to Parent and Purchaser in accordance with the terms of the Merger Agreement. On November 7, 2012, counsel to Parent and Purchaser submitted a letter to the Company that Parent and Purchaser did not believe that the Company Board could reasonably determine in good faith, after consultation with an independent financial advisor and outside legal counsel, that Party H’s non-binding proposal constituted or could reasonably be expected to result in a Superior Proposal, as defined in the Merger Agreement, because, among other reasons, there is a substantial likelihood that Party H’s proposed transaction would not receive antitrust clearance.

    On the afternoon of November 7, the Company Board held a special meeting. The Company Board received a report on the November 5, 2012 proposal from Party H. After carefully and thoroughly reviewing Party H’s proposal with the benefit of advice from the Company’s financial and legal advisors, the Company Board unanimously concluded that Party H’s proposal was inadequate, not in the best interests of the Company’s stockholders, and did not constitute a Superior Proposal, as defined in the Merger Agreement because, as discussed above, there is a substantial likelihood that a proposed transaction between the Company and Party H would fail to receive antitrust clearance.

    At the direction of the Company Board, on November 8, 2012, Dr. Reid submitted to the CEO of Party H a letter communicating the Company Board’s conclusion that Party H’s proposal did not constitute a Superior Proposal, as defined in the Merger Agreement.

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